Competitive Exams: Types of Plans

Strategic plans

These plans are designed to achieve strategic goals. More precisely, strategic plans are general plans that indicate the resource allocation, and priorities and actions necessary for achieving strategic goals. These plans which establish overall objectives for organizations, analyze the various environmental factors that affect organizations.

Eight Major Areas for Strategic Goals

Major Areas

Description

Market Standing

Desired share of present and new markets, including areas in which new products are needed, and service goals aimed at building customer loyalty.

Innovation

Innovations in products or services as well as innovations in skills and activities required to supply them.

Human Resources

Supply, development and performance of managers and other organization members; employee attitudes and development of skills; relations with labor unions, if any.

Financial Resources

Sources of capital supply and how capital will be utilized.

Physical Resources

Physical facilities and how they will be used in the production of goods and services.

Productivity

Efficient use of resources relative to outcomes.

Social Responsibility

Responsibilities in such areas as concern for the community and maintenance of ethical behavior.

Profit Requirements

Level of profitability and other indicators of financial well-being.

Tactical plans

They aim at achieving tactical or short-term goals. These plans help support the implementation of strategic plans. Tactical plans essentially indicate the actions that major departments and sub-units should take to execute a strategic plan. Such plans are more concerned more with actually getting things done than with deciding what to do. They are thus essential for the success of strategic plans.

Tactical plans are developed by middle-level managers, who may consult lower-level managers before finalizing the plan and communicating it to top-level management. Compared to strategic plans, tactical plans cover a shorter time frame (usually 1 to 3 years). A middle-level manager acting as a tactical planner deals with much less uncertainty and risk than the strategic planner. The information that he requires is also less and most of it can be derived from internal sources.

Operational plans

Operational plans are developed to determine the steps necessary for achieving tactical goals. They are stated in specific, quantitative terms and serve as the department manager's guide to day-to-day operations. Operational plans are developed by lower-level managers. These plans generally consider time frames of less than a year, such as a few months, weeks, or even a few days. They spell out specifically what must be accomplished over short time periods in order to achieve operational goals. Lower-level managers who develop operational plans work in an environment of relative certainty. Hence, the amount of risk involved in making operational plans is lesser than that involved in making tactical plans. The information needed for operational planning can be obtained almost completely from within the organization. Unless operational goals are achieved, tactical and strategic goals will not be achieved. Therefore operational plans are necessary for the success of tactical and strategic plans.